concert in new orleans today to help people who just might be hurt by that big gulf oil spill. blues singer tad benoit is one of the performers and we'll be talking with him during the 4:00 eastern hour of the newsroom. also in the 4:00 hour, two of the younger nevilles, the next generation, ivan and ian neville, they'll be joining us live. they're with the group dumps to stunk. and at 5:00 easterntime, we'll talk with mark preston and paul steinhauser about this week's primary elections. right now, "your $$$$$" begins with a look at how the european debt crisis could affect you. welcome to "your $$$$$." i'm christine romans. ali is off this week. the classroom your child is in today will not look the same next year. states are broke. schools will pay the price. education secretary arne duncan will be here to talk about the future of your child's education. but first, take years of spending more money than you

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earn, add an ever-expanding social safety net, throw in high unemployment and nervous investors, it's the recipe for a debt crisis. think we're talking about greece, portugal, spain, europe? well, how about a look right here at home. a $1.6 trillion budget deficit. nearly 40 million people now being fed with food stamps. up to 99 weeks of jobless checks for the 15 million unemployed. uncomfortable parallels with europe. is the u.s. different, though, and why? peter morici is an economist and professor at the university of maryland school of business. chrystia freeland is a global editor at large for reuters. just as the u.s., peter, is moving more towards europe on social policy, europe is coming unglued. what's the lesson here for american policy makers? >> well, you have to pay for the things that you want and you have to buy them cost effectively. you know, we're building out this great big health care system now when we pay 50, 75% more than the germans do for the same services, be it drugs and anesthesiologists or what have you. and we're not raising the taxes we need to pay for what we want. at the end of the day, the price

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of debt in the united states will soar. and, heck, that's one of the reasons people are turning to gold. there's a lack of confidence in the ability of the united states to manage its finances. >> chrystia, this is going to be something we're going to be talking about for months and years to come. the difference is that the u.s. -- investors still have a great deal of confidence in the u.s., in its flexible, political system, and the fact that we always pay our bills. >> well, that's right. and peter is absolutely right, but there are big differences between greece and the united states. the single biggest difference is the u.s. debt is issued in u.s. dollars. greek debt was issued in euros. and greece does not control the euro printing press. the united states does. that is a crucial difference, particularly now when the increasing volatility of global markets has actually made the dollar a safe haven currency. so even as we have seen increasing problems in america's fiscal situation, we've seen a pretty strong dollar and actually america, for now, being able to borrow money really cheaply. the question is, as peter says, how long is that going to last?

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and a smart american government would start taking the measures right now to prevent a greek crisis not next month, but in 2012. >> those are hard decisions. those are political decisions as well. i want you to listen to something the president said in buffalo on his main street tour this week. the president recognizing that american families get this idea of spending more money than you've got. listen. >> it's like going through the family budget, you know, you started getting too many things you couldn't afford and then you're going to start making some decisions. >> except we've heard this before. we've heard this from a lot of different presidents before, peter and chrystia. peter, tell me first, what kinds of decisions have to be made? the president has a fiscal -- you know, a fiscal forum that he has called. by the end of the year, they're going to give some recommendations. what can they do? and can they get it done? >> well, the president runs a government, not a household. so, you know, a household can't say, gee, i'm going to tax the guy next door to pay for what i need. but this fiscal forum will do that. and i suspect they're going to tell us we need a value-added

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tax, so that we'll have taxes in the united states very comparable to europe. but, think of it, we'll have the value added tax, the income tax, sales taxes, corporate income taxes. but in europe, ordinary citizens don't pay much for health care or higher education. here, you'll still have to pay that big health insurance bill and that big college tuition bill. if he pushes through a value-added tax to, quote, set his priorities, then american households, homeowners are going to have a tough time making ends meet. no, he's got to cut the cost of health care. i mean drive down the price of drugs. the sort of thing he wasn't willing to do when he expanded the safety net so much during his first term. >> i think peter is absolutely right, that the key issues are going to be as people focus more on the debt, on the deficit, are going to be, first of all, do you have a value-added tax? the u.s. is the only big industrialized country that doesn't have one. i mean, is that going to be sustainable? and then the second thing is, although i think a lot of us maybe were relieved to put the health care debate behind us, really only half of the health

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care debate happened, and that was expanding coverage and putting some mechanisms in place, maybe in the future for cutting costs. the big question now is going to be, are those mechanisms going to start to bite? and are people, and not just people as patients, but also doctors, the insurance industry, the drug sector, are they going to accept ways of bringing costs down. >> and health care reform, you're absolutely right, it was about access. i mean access to health care. there's still a lot of other questions to talk about. and they're still writing some of these rules. we're going to talk about that later in the hour. but i wanted to bring up paul krugman of "the new york times," he made a good point that shouldn't be lost in this debate either about why the united states isn't necessarily like greece. "the united states can expect economic recovery," he wrote, "to bring the deficit down substantially. greece, which has a larger structural deficit and also faces a grading adjustment to overvaluation with the euro zone, can't." peter, that's another part of this equation. we can cut waste and spending, we can cut unnecessary programs, we can raise taxes or change the tax structure, but if we get a

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blockbuster economy, god willing, that gives politicians some cover too, doesn't it? >> yes, but we would need one heck of a blockbuster. you know, the president's budget assumes 4% growth. that is highly unlikely. most economists looking at 3% growth over the next several years. why? we have this huge trade deficit on oil, which is not likely to get resolved, especially after the big spill, and the huge trade deficit with china. both of those things are a terrible drain on u.s. growth. this administration has shown a reluctance to deal with either. so my view is, that's kind of like wishing for, you know, a rich uncle to die and leave you his money. we're going to have to address this thing by doing a better job of running this government. >> he mentions trade deficits too. and we had more numbers this week that show, well, it's almost -- we're back to pre-recession kind of behavior where we're importing way more than we're exporting and that deficit is surprising economists again. >> for sure. i interviewed peter orszag, the budget director, the president's budget director, this week.

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and, too, i asked him the question, the krugman question. i said, you know, look, peter, maybe you don't have to worry about this. maybe the economy is going to come back like a locomotive and that economic growth will take care of the deficit and the debt. and he said, you know, i don't think so. and the other point that he made, which i think is a really important one in all of these discussions is, we just don't know. we don't know how strong economic growth is. the prudent action, given that, is going to be to take care of the fiscal situation. and if we're surprised by growth on the up side, that's not going to be a bad thing. >> right. all right, chrystia freeland, global editor at large at reuters. also, who's going to stick with us, peter morici. we're going to talk about gold in just a little bit. so don't go away, peter. all right. the school your child is in today is going to look vastly different next year. programs are being cut. stimulus is running out to keep teachers in their jobs. we'll ask the nation's top educator, education secretary arne duncan next.

just got better. chances are your school district is more than likely paying the price of the recession. they'll have less money this fall to do the same job they did last year. here's what it will look like for you -- teacher layoffs. new jersey, new york, california proposing massive job cuts in addition to many other states. those teacher layoffs will lead to larger class sizes. some states are cutting programs. sports, the arts, clubs all on the chopping board. others have gone to a four-day school week to save on transportation and operating costs, to literally keep the energy bill down. tough choices to cut costs, but in the end, what is the cost to your child's education? let's talk about it with the guy in charge, education secretary arne duncan joins us from washington. it's really a once in a lifetime kind of a convergence of events for many of these schools who are having to cut, in some cases, big percentages of their

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teachers. is your child's education going to suffer in the fall? >> we're very, very concerned about this across the country. california is looking at as many as 36,000 teachers being laid off. new york city alone is looking at about 6,700. the state of iowa, 1,500. so this is urban, this is rural, this is suburban. none of this is good for children. none of this is good for education. none of this is good for a country's economy. and so i'm strongly urging congress to take emergency action. there's a jobs bill that senator harkin has worked hard, chairman obey, congressman miller, and we would love to see a couple hundred thousand teacher jobs be safe for this fall. we don't want to see class sizes go to 40. we don't want to see summer school eliminated. as you talked about, we don't want to go to four-day weeks and extra all extra curriculars eliminated. none of that is good for the country. none of that's good for our children. and we want to stave off this

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potential disaster. >> and for our competitiveness with the rest of the world as the whole world starts to recover from an economy and different countries are, frankly, recovering more quickly than others. what about any kind of silver lining? i hate to say there's a silver lining in tens of thousands of teacher job cuts, but could this force districts to make big changes? could it force reform? there's that old saying in washington, "never let a good crisis go to waste." >> yes. well, as you know, we've been pushing a very, very strong reform agenda. we've been extraordinarily pleased with the level of progress. 48 states together working on raising standards, making sure we're getting great teachers and principals into underserved communities. so we're pushing a very strong reform agenda. that's my biggest fear is if you see these kinds of massive layoffs and class size skyrocketing, summer school being eliminated, it's hard to talk about reform when you're simply trying to survive. and so we have to educate our way to a better economy. we have to keep moving forward and not take a step backwards. and this would be a huge, huge step in the right -- in the wrong direction and we simply can't afford to do that now. >> let me ask you, you're a dad.

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you have a 6-year-old and an 8-year-old. so you're a dad and you're also the education chief. if you're one of the parents who's listening to us right now and they're very worried about a big class next year, they're losing important foreign language access, you know, to education, foreign language instruction in their school or clubs and music programs, as a parent, what should parents do to really keep their kids engaged in school if they're going have fewer services? >> well, i think what parents can do now is really speak to their legislators. and we have a chance to act now and through emergency legislation stave out of off this catastrophe, but we have to do it with a sense of urgency. we can't wait until september or october to do this. it's to late. and so, again, i've written letters to the leaders of the house and the senate and am strongly urging them to take action now to stave off these devastating cuts. and, you know, particularly for disadvantaged children, summer school is so critically important. we need more time, not less. and so these are -- you know, any superintendent worth their salt is figuring out their summer plans now. they're putting together a budget now for the fall. so this is not something we can sit around and wait and, you

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know, get two, three or four months down the road. we need to act and we need to act with a real sense of urgency. and parents can help to drive that conversation both locally and nationally. >> all right, arne duncan, the education secretary. and you're going to stick with us because you've got some fantastic young people that you've been working with and another important program that's near and dear to your heart, financial literacy in the schools. teaching kids about money. we're going to talk about that later in the hour. so don't go away. thank you, sir. party like it's 1849. but if you're just getting in now, is this the gold rush or nothing more than fools gold? six ways to buy into the gold rally and whether you should, next. negotiator: a guy named his own price, wants a room tonight for 65 dollars. manager: we don't go lower than 130. negotiator: big deal, persuade him. manager: okay. $65 for tonight. negotiator: you can't argue with a big deal. announcer: big deal days are back on rental cars.

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gold to go. check out the new atm kiosk at the emirates palace hotel in abu dhabi. you feed it cash and you get

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small gold coins or bars that weigh up to 10 grams. the manufacturer says soon it will be able to take bank cards to dispense gold to you as well. why would anybody want to buy gold, right? well, it's up 35% for the year. up 35%. you probably won't get it from a vending machine, but there are six ways you can buy gold -- mutual funds, exchange funds, stock, not to mention gold bouillon, gold coins, even gold jewelry. stephen leeb is the author of "game over." and back with us again, peter morici, economist and professor at the university of maryland school of business. and, of course, any conversation about gold should be prefaced with a lot of people say it's already had a huge run, why would you get into gold now? peter morici, you know the fundamentals of this. tell me, why is gold around the world rallying so strongly? >> the poor finances of the united states and european governments. you know, the united states is almost in as much trouble as the europeans are budget wise. now, if we keep borrowing a lot,

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say a trillion dollars a year, our debt will get to the point where long-term interest rates will rise. instead of treasury securities paying 4%, they'll pay 7%. now, if you buy a treasury security today at 4% and five years from now they're selling at 7%, the security you brought today at 4% is going to be worth a lot less. and you really can't hedge against that with any kind of paper asset the u.s. government issues. the alternative is gold. so people are starting to put a larger share of their portfolio in gold. and as you outlined earlier, it's getting easier to buy gold. we have these exchange-traded funds and so forth. so you don't have to buy it and bury it in your backyard like a french farmer. >> you don't need, stephen leeb, a bunch of gold bars. if you do have them, however, it's advantageous because i'm told a gold bar now is something like $900,000 and it's up pretty sharply over the past year or so. do you think this is the right time for people to be buying gold? >> if your perspective is a few

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years ago, absolutely, christine. >> and you think that every portfolio should have a little bit of gold in it, right? >> i think, you know, history is on that side right now. i mean it's -- this is not -- yes, it's had a tremendous run this year and sure it could correct. it could come down 10% any time. but what i don't think people really realize is that since gold began trading freely, which was in 1971, if you look at how it's performed, from 1971 to present, i mean that's almost two generations, that's about 40 years, gold has basically kept up with the s&p 500. it's been a great asset to have over the long term. now, it's been volatile. now, the story is more than just that, because during times when -- times that are tough, like the '70s, where you had a lot of inflation, gold was the only place to be, almost literally. i mean there were other commodities, oil service companies, et cetera, but gold was 25% or so a year after inflation. so everybody thought gold's just an inflation hedge. no.

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during the 2000s, gold is up every year. so this recent move of 36%, you have to tack that on to the fact that gold has risen every year in the last ten. >> all right. if you think that you want gold in your portfolio and you want to buy here at basically all-time highs, there's several ways to do it and you've brought along some ways. you can buy mutual funds. you have a couple of those. you can also buy exchange-traded funds. walk me through -- you can buy gold bangles, which is not -- actually, believe it or not, it is an investment. walk me through the investments you can make in gold. >> well, you can certainly buy mutual funds. a couple that we like, asa, which is a closed-end fund, that you just buy it on the new york stock exchange. you can just call your broker and just say, i want to buy "x" amount of dollars in asa. and what you do is you get a collection of very, very good gold companies run by a very, very shrewd guy. >> great. >> you can buy also gold mines. and i think there's a list of them. newcrest, which, to me, is the best of the biggest right now.

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i mean they're incredibly well run. barrick gets stars because they eliminated all their hedges, christine. they really bit the bullet when gold was much lower. they say we want to be a pure gold play. silver wheaton i think is probably the best way of playing silver. and novagold, for those of you who have a big stomach and can, you know, tolerate a lot of volatility, a lot of speculation. i mean that's one that could go up several fold. >> all right. gentlemen, thank you so much. and we mentioned exchange-traded funds. i always like to say what that is. these are -- they're not mutual funds. basically they trade like a stock and they track -- they track a particular instrument or a commodity. gold bullion is one that you mentioned, gld is that ticker symbol if you want to look it up and do your own research. >> right. >> silver bullion is slv. when we talk about exchange traded funds, that's what we're talking about. peter morici and stephen leeb, thanks, gentlemen. as always, a fascinating discussion. turning now to health care. health care reform won't be in effect -- in full effect for another four years. but guess what? things are happening right now that will affect how you receive health care and who receives access to health care.

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affect wheat output in the u.s., the shipping industry in norway, and the rubber industry in south america? at t. rowe price, we understand the connections of a complex global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment objectives, risks, fees, expenses, and other information to read and consider carefully before investing. health care reform is on its way. but, as you know, the policies roll out gradually through 2014. but there are some health reform changes starting right now, including the fact that if you have a child under 26, they can remain on your health insurance. the president talked about why this is necessary. >> as a lot of you know, when

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you leave college, sometimes getting that first job, you may not be able to get health insurance right away. and so we want to be able to make sure that those young people can stay insured until they get a job that has health insurance. >> these are the things you can see and feel right now from health reform. some things you're not going to feel for years. but some things are happening right now. and we're joined by our good friend andrew ruben. andrew is the vice president of clinical affairs at nyu langone medical center. and this is one of them, the 20 -- if you knew the number of e- mails -- i'm sure you do too for your radio show you get from people saying, wait a second, how do i get my kid on this? my kid just graduated. what's happening? they're writing the rules this week. >> the rules are actually pretty much out right now. >> right. >> so there was a lot of questions about what the dependency status is, so that's now known. so you have to be, obviously, under age 27. so up to age 26. you don't have to live in your parents home. your parents don't have to be claiming you as a dependent on your tax return. and my favorite one is, you can be married. >> right. >> and -- but again, the provision only applies to the dependent. >> i think it's so interesting

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because it's -- i mean, technically, you could have a kid who is married, who is going to have a baby -- >> or has a baby. >> and that person is on your insurance because they couldn't get insurance someplace else. they also can't have access to any other medical insurance in another place. >> the rules -- actually there are two sets of rules governing this. >> right. >> one from the health and human services, one from the irs. and the one from health and human services, as we talk about, is less than clear on that. >> oh, yes, we're going to have years of figuring out what those rules mean, as they're still being written. let's talk about the other things you can feel and see immediately. there are some things that are going into effect now. some things like the state exchanges to buy health insurance and the subsidies, that stuff isn't happening for a while. >> right. >> what's happening -- what else is happening right now? >> another big one is the $250 rebate for medicare recipients who reach the what we call the doughnut hole for prescription drug coverage, which is about $2,800 this year. starting in mid-june, $250 rebate checks will be going out to these seniors once in a

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rolling sequential way once they hit that doughnut hole amount. >> right. >> the key here, and this is really important for seniors to understand, it will be mailed to you automatically. don't -- if someone calls and says i want your bank account number, don't give it to them. >> right. oh, that's great advice. >> medicare knows who you are and they're going to be sending you the checks. >> they will send you the check, $250. i tweeted this, actually, this week and i got all this grief from people who said, it doesn't close the hole. >> right. >> of course it doesn't close the hole. it's going to take years to do that. >> ten years. >> ten years. all right. also, coverage for kids 26 years and older. we mentioned kids can't be denied coverage for preexisting conditions. that's immediate? >> that's immediate. and that's actually a big deal. the baby in colorado, you'll recall, couldn't get coverage because they were obese. >> that's right. >> that goes away. another big one, which is actually being worked on right now, and that has to do with people who have preexisting conditions and have not been able to have insurance for at least the past six months. there's $5 billion in the bill in the wall for that. they're working out -- hhs is working out with the states how to implement this program. we'll have more real soon. >> we're going to put them in a big high-risk pool and figure out how to get those people covered immediately.

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and of course, no lifetime caps. that's a big one. >> and that happens right away. andrew rubin, we're going to need you between now and maybe 2015 to keep dropping by to tell us what -- >> 2018, therese. >> 2018. okay. well, thank you. we'll start booking it right now. andrew ruben, thank you so much. take a look at this question. do you think you can answer it correctly? its just one of 40 questions the department of education and the treasury have come up with to test the financial smarts of students and teachers across the country. how much money does ali velshi have to save three years from now to pay for his season tickets for the braves? $3,000 now, $1,000 each year, $1,000 now and $2,000 two years from now or you just don't? it goes right where you need it, relieving allergy eyes in minutes. visine®-a. the most complete allergy eye drop.

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before the break, we asked the following question -- ali needs to save up to $3,500 in three years to pay for season tickets for the braves. which strategy will give him the largest amount of money after three years, if the interest rate is 5%? take a good, hard look. if you answered "a," congratulations. but just how money-smart is the rest of america? to find out, the department of education and the treasury came up with a challenge, a test of 40 money questions similar to this one aimed at high school students and teachers across the country. take a look. >> jordan duke. >> reporter: for these high school students, this is the money shot. with the nation's top money man -- >> the stakes are so high for americans -- >> reporter: and -- the nation's top educator. >> the best and i would say the only way to make smart financial decisions is through knowledge and education. >> reporter: financial knowledge and education are the goals of the national financial capability challenge, a

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40-question online exam taken by 76,000 students nationwide. aaron moore had the top score, a perfect one. >> we learned math, how to add, subtract, multiply and divide, and we learned english, to write and speak well. but what everyone does not learn is finance, the missing piece to our future. >> reporter: unfortunately, aaron and the other top scorers, who earned a trip to the treasury in washington, are the exceptions. >> the average score across the country was just 70%. too many students failed to answer basic questions about credit cards, car insurance and compound interest. making the right decisions about personal financial just seven or eight times out of ten actually isn't good enough. >> the challenge was also a wake-up call for the nation's educators, who need to be fluent in finance if they're going to teach it. terri carson, a certified public accountant, has been doing just that at stonewall jackson high school, a public school in virginia, for the last five years. >> what do i think we should do to ensure students in this

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country receive the essential financial literacy education that they need? stop wasting time. like nike says, just do it. >> reporter: 2,500 teachers did, in fact, do it, signing up for the challenge and educator tool kits, which included 29 specific lesson plans in areas like "budget your money,," "savvy savers," "understanding your paycheck," and "roof over your head." teaching life lessons about money and finance are important to these two men. they're not only behind the challenge, they're both parents. >> tim's kids are little older. i got little guys at home, 6 and 8, but we started them on allowances. >> do you want to talk about things you got right and things you didn't get so right? >> i'm joined again by education secretary arne duncan. also joining us is terri carson. you saw her in that piece. she's a teacher at stonewall jackson high school, a public school in virginia. 118 of her students participated in this challenge. half of them scored in the top 20th percentile.

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and joining us from baltimore is aaron moore. he, as you just saw, earned a perfect score on the challenge. aaron, because you earned a perfect score, i'm going to start with you, buddy. fantastic job. i saw some of these questions. you know, you really got to think and you got to learn about math and money. tell me, how is it that you got interested in this? and do you think that you're going to keep going forward with money maybe as a career, or is this just going to help your life? >> well, actually, i've been enrolled in a magnet program at my school in baltimore county. it's the academy of finance magnet program. so i've taken classes in accounting, personal finance, banking and credit, economics and world finance, and so many more. so that really garnered my interest in money, going through the academy of finance program, and i definitely will continue with it. this fall, i will be going to villanova university in their top-ranked school of business. >> excellent. very good. i'm sure we're going to see you at this table one day, telling me about the company that you're running. i only hope.

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secretary duncan, you know, in high school, you kind of have to graduate with a couple of years of a financial -- of a foreign language. you know, you're moving toward a currency in a foreign language, a fluency in a foreign language. what about finance? why aren't more schools teaching about finance and money? this is -- this is what ties every part of your daily life together. >> right. well, i think there's absolutely an increasing awareness, and phenomenal teachers like terri are really instilling these lessons, these values, these lifelong habits in students. when you see someone like aaron -- if i'm lucky, some day i'm going to be working for aaron. he's just an extraordinary young man and a great, great future. but he's doing so well because he's had that exposure. he's had great teachers working with him. he's got great parents who have helped him. we have to make this the norm, not the exception. aaron's a phenomenally committed, talented student, but he's had the opportunities. and as you said, we have about 2,600 teachers around the country working with students. about 76,000 students participated this year. we want to expand that going forward.

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but phenomenal teachers like terri are making a huge difference in students' lives, and i just am so appreciative of her leadership and her commitment in the classroom. >> hey, terri, how do you connect with the kids about money and finance? i mean, sometimes, you know, money can be separated out, and it's economics and it sounds so boring. but money is everything. money is a cell phone bill and how to manage that. money is how you pay $1.07 for a new song on itunes. there are a lot of real-world practical ways that you can teach kids about budgeting money, saving money, the roof over the head, all those things that are in the program. >> absolutely. but they automatically have an interest in money. >> you know, they all want to amass whatever the luxuries that their parents have, you know, at a very young age. so it's very easy to connect it. you know, it would be great -- i'm a huge fan of your show, christine -- >> oh, thank you. >> -- and it would be great if it aired sometime during the week because saturday and sunday are not when students are home watching it. >> right. >> so that would be a good idea. >> well, you know, we could do more on -- note to producers. we could do more on our student

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channel to maybe put together some 101 things about money and finance. terri, what about the aptitude of your students and their interest in learning more about money? because of all the things that have happened over the past two years, i mean, money and business and the financial future of this country are pretty much the top story right now. >> right, so it's a very relevant time to teach that subject. i think that aaron moore is a fantastic student. he's also very well prepared. he didn't take just one personal finance course, he took several over his academic career. but a lot of our students -- only about 55% of the students run through the business department, period. so you know, not everybody is getting that essential money management skill when they leave high school. >> secretary duncan, should we have -- we have a handful of states that they do require this. they require this kind of training, like a foreign language, but you know, a financial language in high school. should we have a federal mandate

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maybe to have some sort of nationwide curriculum, or should we let the districts figure out how to do it? >> well, i don't think we should or can mandate curriculum from the federal spot, but you have a number of states stepping up in this area, and that's very, very encouraging. and again, these are skills that are going to last the student for a lifetime. what we don't want them is leaving high school and going to college, and you know, find themselves in debt that they can't begin to handle and they're going to be saddled with that for a long, long time. if students can't balance a checkbook, if they don't know how to invest in a 401(k) plan, we're really not equipping them to be successful as adults and to be productive citizens. >> aaron, you get the last word. you're -- you know, how do your fellow students see you? are they more excited about learning about money and finance, do you think, or is it something you kind of have to coax people into realizing it's important and it can be cool? >> well, you can see where financial education will tell you. you know, this last couple weeks, you know, when i tell people, yes, i'm going to be on cnn, or, yes, i'm speaking at the treasury department, they get very interested.

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you know, why are you doing that? why are you doing this? and then you explain to them and kind of bring them into that. my friends actually have a nickname for me, that they've been calling me by -- the last three years or so, they call me mr. president. and they call me that because of my academic involvement and also my involvement with extracurricular activities. you know, my organization, future business leaders of america, i'm state president of maryland, and we have about 3,000 members. and we actually did a financial literacy project. so we like to, you know, expose members to it, expose anybody we can to it. even in my persona life, you know, my friends, you know, they -- i have them make budgets sometimes, you know? it's, like, you know, how much money are you getting in allowance? let me help you with that. because, you know, we want to go out to the mall, so you got to have some money, dude. >> it's true! and you're absolutely right, aaron, that the first step is the budget, because you can't figure out how to spend it or save it until you know where it's coming in and going out. and that's exactly the first step of advice. aaron moore, thank you so much.

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terri carson, congratulations. keep up the good work. and of course, education secretary arne duncan, thanks for dropping by today. thanks, everybody. could your state be condoning drinking, gambling, even marijuana? we love getting our outback dirty. because it seems like the dirtier it gets, the more it shines. the subaru outback®. motor trend's 2010 sport/utility of the year®.

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time now to take a look beyond the headlines. joining me, our good friends, comedian hal sparks and author and satirist joe queenan. and gentlemen, welcome to the program. >> thanks. >> a lot to talk about today. i want to start with mortgage defaults, people literally just walking away from their mortgage. it usually happens when lenders make bad loans or borrowers end up with bigger payments than they can handle. but something new is happening across the country. people are simply choosing not to make their mortgage payments, even when they can afford them. you know, they really don't like the banks. the think the banks -- you know, the banks screwed around, they think, why should i pay this? that brings us to our "romans numeral" -- 12%. these so-called strategic defaults account for about 12% of all defaults in february. that's according to morgan stanley. and that's up from only about 4% in 2007. so strategically defaulting may seem a bit sketchy morally, right? but it could be good for the economy.

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consumer spending rose 3.6% last quarter. so are borrowers skipping out on their mortgage payments so they can spend more money elsewhere and get back to their old lives? >> absolutely. well, a lot of people find themselves under, you know, stacked debt of different types, you know, the mortgage being sort of your big primary big hitter, then credit cards, then any other minor payments you have to make, like your insurance payments and those kind of things. in the shuffle, mortgage payments have always the one you hold onto, because that's your biggest investment. if that goes -- >> it's the american dream. >> and it's also the root of a lot of your credit -- >> right. >> -- that if you have some equity, it's -- you can -- you've got something to hang onto. now that equity is gone anyways, so it's better in many ways to pay off your credit cards, for some people. >> and people are doing that. >> oh, yes. >> i mean, we've looked at the numbers, and people are -- you're seeing an alarming number of people who are paying the credit card before the mortgage because you can't put food on the table with the mortgage. but is it -- i mean, what happens to american society when people don't pay the biggest contract they're ever going to write in their life? >> you know, i think that, like, tomorrow, some economist who won the nobel prize will explain buy

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this theory doesn't work because i read it and i thought, yes, that's right, it's great for the economy because they don't pay their mortgage, but they go to restaurants and they buy cars. and tomorrow, some guy named stieglitz or something like that from yale will say it actually doesn't work that way, or david leonard from "the new york times" or the "freakonomics" guy. and they'll explain, no, actually, the money that went here will eventually have to go back there -- >> and that's kind of -- >> -- or you're going to lose your house. >> well, that's kind of what's happening, too, is that some people, i think, feel a little bit safer in holding off on their mortgage payment because you've got a 35-year mortgage or something like that -- >> right. >> -- you're, like, hey, man, they can wait for four months while i get my other stuff paid off. >> how about a fixed rate -- refinancing into a fixed rate 125-year mortgage? then we can all afford our mortgage payments. >> that makes sense. >> but, come on, it's a nation of -- >> everybody should refinance -- >> i just -- i just refinanced. everybody should do it, right? >> you guys have decent credit because if you don't have a good credit score, you're not going get -- >> i never -- i never didn't pay my mortgage. i have great credit. >> right. >> but everybody should refinance now because it's never -- it's never going to be a better time -- >> yes, rates are so low. >> -- to finance. you buy a house -- buy a house in a short sale and refinance. >> and that with the job

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prospects for generation "y," they're going to live in the house anyway. >> oh, yes! oh, yeah! >> so why not have a 125-year mortgage? >> not going to live in my house. >> three generations will be there. >> there's no generation "y" in my house! >> well, you have -- >> generation "z." all right, when times get tough, states -- speaking of no money -- they bank on vice for cash. 38 stating together will be $89 billion short in their budgets next year. it seems there's no better time to bet on vice, right? since early 2008, five states have expanded sunday alcohol sales. at least half a dozen are weighing measures to allow some legal pot sales. a dozen have expanded or are considering expanding gambling. can the states, you know, suddenly embrace vice to get themselves out of trouble? >> isn't this just sort of a governmental version of what people do with their vices? you know, if you can't be happy naturally, drink. if you can't, you know, make money -- >> -- grow your economy! >> -- i mean, then gamble. if you can't meet somebody, get a prostitute.

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like, there's literally -- like, this is the states going, well,, you know -- never thought about >> that's really just the manufacturing of it. thank you. >> i think the big -- economists would tell you these states can't tax their way out of their problems. just with these vice taxes. it's bigger than that. >> the thing that's wrong with the vice taxes, you're taxing poor people. that's the worst thing. it ruins society. it makes people who are already poor worse off. >> make golf a vice. >> you shouldn't fund your education system with lotteries. which is what people try to do. the second thing is, it's like you have to solve the problem. you can't solve the problem with taxes. you're going to have to cut some where. you're going to have to renegotiate those pensions. you're going to have to do something. you can't just tax. >> you also have pot being the number one tax crop. i'm a nonuser. board of marijuana policy project. i believe in legalization. i think decriminalization is a smart thing to do.

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you see them stampeding towards this because it's an under the table cash crop that's running half the states. states like kentucky, california. oregon. they have a tremendous part of their economy is this underground pot crop. and now they're starting to go, well, if we just had a piece of that, this might all shake out okay. stop living a lie. >> i think when you look at states and how much trouble they're in, they're in so much trouble that they have to think of everything. and that includes massive cuts to services, massive tax increases, new fees. i mean, when you're talking about -- or the economy has to really come roaring back. not a lot of people think that's going to happen. >> the economy has to come roaring back and they have to cut. >> right. >> and they have to tax. >> right. >> but not those taxes. those are terrible taxes. >> you usually don't think of golf and vice in the same breath. actually, you do. >> you do now. >> hmm. interesting tax in there

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somewhere. >> exactly. >> hal sparks. >> sales on the internet are already -- >> using it. >> don't move, guys. next, we're going to -- why your smart phone, blackberry, might be taking a toll on your health. first, a california chicken farmer proves that sometimes all you need to stay afloat through tough times, a few loyal customer. dan simon reports in this week's "turn around." >> there you go. look at that. are those pretty? >> reporter: apparently green eggs aren't just found in the dr. seuss classic. you almost don't want to eat it because it's so pretty. >> i know. >> reporter: we're at the organic soul food chicken farm an hour from san francisco. it's a business that stirs such passion that loyal customers refused quite literally to let it go down in flames. after a fire killed 1,200 chicks and destroyed their coops last september, alexis and her husband, eric, thought the struggling farm they started just three years ago was

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finished. >> i was convinced we were done. you know, we had already, we were skating by. >> reporter: but alexis had customers to satisfy, including renowned chef alice waters of the legendary chez paneis in berkeley, california. >> she's dependent on me and i'm dependent on her. if anything happens to her, what i'm doing is not as good. >> reporter: so chez panisse and other restaurants bonded together to help their supplier. this is what those chefs like so much, what you're seeing right here. the chickens roam the fields freely and eat the natural grass and that, they believe, makes for a higher quality egg. eggs they apparently could not live without because when the fire seemingly destroyed the business, her customers got together and said we're not going to let that happen. but none of it would have been possible without this woman. bonnie powell, alexis' close friend and local freelance writer.

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>> i just figured if lots of people knew about it, we could figure something out. >> reporter: she got the word out that alexis needed help. >> it really snowballed. it was kind of amazing how many people just felt touched by this, like no, we can't let soul food farm die. we had a fancy auction. we had a raffle. we had several fund-raising dinners. >> reporter: the efforts brought in $30,000, enough to keep alexis in business, enough to keep those eggs and chickens coming. dan simon, cnn, vacaville, california. but now zyrtec®, the fastest 24-hour allergy relief, comes in a new liquid gel. new zyrtec® liquid gels work fast, so i can love the air®. what did we make better ?

back with us, hal sparks and joe queen. "health" magazine reports 84% of users check their personal devices just before bed, hal, and as soon as they wake up.

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over a third of smartphone users would pick their -- over a third of smartphone users would pick their blackberry over their significant other if they had to pick one to live without. oh, god, that's sad. turns out these devices, they create more stress than they do help, and more stress could mean everything from colds to skin problems to weight gain to apparently divorce. if you're going to choose the blackberry over your husband. >> obviously, we're not talking about the most sound relationships in the first place. obviously, you probably met this person over your blackberry. >> will you marry me? >> exactly. >> hold on just a second. in a meeting. >> lol, what kind of response is lol to will you marry me? probably more honest one. i think, you know, devices are like anything else and we are in a transition as to what we deal with. this technology is so overwhelmingly fast and we're still playing catch-up in a lot of ways. they are high level adepts just as myself who really enjoy it. i feel i can set it aside and use it when i want to. >> you set limits for yourself. >> for example, i got the wifi

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ipad because i didn't want to be on the internet all the time. i want to sit and do some writing so i made sure i couldn't just get it in any train, anywhere i was. >> generation y was a recent study that showed almost all of them sleep with their phones. >> that's great. because a lot of them can't get dates so they need that phone. if you want to reach me, call me on my phone. don't e-mail me because i hate work. from the time i was a kid, i never wanted to work for other people. i have always worked for myself, so answering e-mail all the time, you're telling me that i have to work now and you're not going to tell me anything. i'm going to work when i feel like working so if you send me an e-mail, don't count on me responding to it in 15 minutes or even that day, because i'm not working for you. i'm working for me. >> you think you're the exception? >> no. i think it's generational. i think a lot of people my age just basically say i ain't doing it. >> thanks, guys. you can catch hal and his one-hour standup comedy special premiering on showtime june 4th. that wraps it up for this show. you can join us and our running